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Artificial intelligence (AI) Act

Context

Artificial Intelligence (AI) is considered as one of the new technologies with the highest potential to transform the financial sector in the near future, due to its capacity to add value to practically every step of the value chain, both in terms of productivity and revenue generation. AI developments are now quite widespread in the financial sector, with many firms using AI in different areas such as product personalisation, process automation, claims handling and fraud detection. However the number of financial firms using AI at scale for multiple activities is still limited.

Several obstacles need tackling for ensuring a wider uptake of AI. Access to appropriate data sets and skills to handle large amounts of different data are the main issues currently. Other challenges concern access to hardware capacity and the capacity to deploy operationally AI models, although cloud services are playing an increasing role in this area. The further development of AI in the financial sector also entails certain risks. The main challenges are the explainability of AI models, potential accountability issues and possible biases in data sets. AI use may also raise systemic issues if all players use similar models.

Following a White Paper on AI setting out policy options on how to achieve the twin objective of promoting the uptake of AI and of addressing the risks associated with certain uses of the technology, the European Commission proposed a regulation on AI (the AI Act) in April 2021. The AI Act puts forward harmonised rules for the development, placement on the market and use of AI systems in the EU following a risk-based approach. AI systems deemed to be ‘high risk’ for the fundamental rights or safety of customers will have to comply with a set of requirements for trustworthy AI and follow conformity assessment procedures before they can be placed on the EU market. These requirements apply in a horizontal way across all sectors and at present only AI-based credit scoring and creditworthiness assessment systems are concerned by these rules in the financial sector.

Contributions to the policy debate

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

Public and private
sector views

AI Act: is the EU approach the right one? - February 2022 new

Olivier Fliche - Autorité de Contrôle Prudentiel et de Résolution | Petra Hielkema - European Insurance and Occupational Pensions Authority | Alex Ivančo - Ministry of Finance, Czech Republic | Diana Paredes - Suade Labs

Will AI be a game changer in the financial sector and under what conditions - September 2020

Bruno Scaroni - Assicurazioni Generali S.p.A. | Chris Bartz - Elinvar | Dominique Laboureix - Autorité de Contrôle Prudentiel et de Résolution

Is AI use growing in the financial sector? - April 2020

Joachim Wuermeling - Deutsche Bundesbank | Pēteris Zilgalvis - European Commission | Patrick Montagner - Autorité de Contrôle Prudentiel et de Résolution | Nausicaa Delfas - UK Financial Conduct Authority | Bruno Scaroni - Assicurazioni Generali SpA | Diana Paredes - Suade Labs

Data challenges associated with AI - September 2019

Kostas Botopoulos - Bank of Greece | Olaf Sleijpen - De Nederlandsche Bank | Garrett O’Neill - Data Protection Commission, Ireland | Ermir Qeli - Swiss Re | Diana Paredes - Suade